FORWARD LOOKING STATEMENTS

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2 FORWARD LOOKING STATEMENTS The following investor presentation contains certain forward-looking information within the meaning of applicable securities laws relating, but not limited, to Canadian Pacific s operations, priorities and plans, anticipated financial performance, including our 2019 full-year guidance, business prospects, planned capital expenditures, financing strategies, programs and strategies. This forward-looking information also includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance. Forward-looking information may contain statements with words such as anticipate, believe, expect, plan, financial expectations, key assumptions, outlook, guidance, or similar words suggesting future outcomes. Undue reliance should not be placed on forward-looking information as actual results may differ materially from the forward-looking information. Forward-looking information is not a guarantee of future performance. The purpose of our expected 2019 adjusted diluted EPS is to assist readers in understanding our expected and targeted financial results, and this information may not be appropriate for other purposes. By its nature, CP s forward-looking information involves numerous assumptions, inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking information, including but not limited to the following factors: changes in business strategies; general North American and global economic, credit and business conditions; risks in agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures; industry capacity; shifts in market demand; inflation; changes in laws and regulations, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; uncertainties of investigations, proceedings or other types of claims and litigation; labour disputes; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; effects of changes in market conditions and discount rates on the financial position of pension plans and including long-term floating rate notes; and investments, various events that could disrupt operations, including severe weather, droughts, floods, avalanches and earthquakes as well as security threats and governmental response to them, and technological changes. The foregoing list of factors is not exhaustive. These and other factors are detailed from time to time in reports filed by CP with securities regulators in Canada and the United States. Reference should be made to Management s Discussion and Analysis of Financial Condition and Results of Operations in CP s annual and quarterly reports filed on Form 10-K and 10-Q, respectively. Forward-looking information is based on current expectations, estimates and projections and it is possible that predictions, forecasts, projections, and other forms of forward-looking information will not be achieved by CP. Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise.

3 NOTE ON NON-GAAP MEASURES Except where noted, all figures are in millions of Canadian dollars. Financial information is prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), unless otherwise noted. CP presents non-gaap earnings information in this presentation to provide a basis for evaluating underlying earnings trends that can be compared with the prior period's results. It should be noted that CP s non-gaap earnings as described in this presentation, have no standardized meanings and are not defined by U.S. GAAP and, therefore, are unlikely to be comparable to similar measures presented by other companies. For further information regarding non-gaap measures see the Non- GAAP Measures supplement to the press release on our website at investor.cpr.ca. NOTE ON RESTATED FINANCIALS Prior year comparative period figures in this presentation have been restated for the retrospective adoption of Accounting Standards Update ("ASU") , discussed further in Note 2 Accounting changes in CP's Interim Consolidated Financial Information in the Q Earnings Release on investor.cpr.ca.

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5 HIGHLIGHTS Record quarter and year by nearly every financial measure >$7B in revenues record operating ratio Q Revenues $2.0 billion +17% Operating Income $874 million +28% Revenues $7.3 billion +12% Operating Ratio 61.3% -30 bps New labour agreements provide stability for multi-year growth Strong momentum as we enter 2019 Adjusted operating ratio (1) 56.5% -370 bps Diluted EPS $ % Adjusted diluted EPS (1) $ % Adjusted operating ratio (1) 61.3% -110 bps Diluted EPS $ % Adjusted diluted EPS (1) $ % (1) For a full description and reconciliation of Non-GAAP Measures, see CP s Q Earnings Release on investor.cpr.ca

6 (1) FX rate approximately USD/CAD $1.30 Tax rate in the range of 25.5% to 26.0% Other components of net periodic benefit recovery to increase by $11 million vs No material land sales (1) For a full description and reconciliation of Non-GAAP Measures, see CP s Q Earnings Release on investor.cpr.ca

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8 REVENUE HIGHLIGHTS FREIGHT REVENUE FX-adjusted revenue variance (1) +18% Grain Coal 5% 21% VS Q Potash Fertilizers & sulphur 24% 18% Forest products 12% RTMs: +9% FX: +2% Energy, chemicals & plastics -71% Metals, minerals, consumer 5% 46% Fuel: +3% Price/mix: +4% Automotive Intermodal 4% 11% (1) For a full description and reconciliation of Non-GAAP Measures, see CP s Q Earnings Release on investor.cpr.ca

9 BULK Q4 18 VS. Q4 17 MARKET DRIVERS & OUTLOOK Freight Revenue (FX-adj.) (1) 12% Record fourth quarter and full year for RTMs 7% Canadian grain and potash Freight Revenue per RTM (FX-adj.) (1) 5% 2018 REVENUE BREAKDOWN Continued strength in Canadian grain; regulated grain VRCPI revised to 5.7% for the crop year Grain Coal Potash Fertilizers & Sulphur 16% 23% 8% 53% Headwinds in US grain expected to persist in the near term (1) For a full description and reconciliation of Non-GAAP Measures, see CP s Q Earnings Release on investor.cpr.ca

10 MERCHANDISE Q4 18 VS. Q4 17 MARKET DRIVERS & OUTLOOK Freight Revenue (FX-adj.) (1) RTMs Freight Revenue per RTM (FX-adj.) (1) 6% 16% 2018 REVENUE BREAKDOWN 24% Record fourth quarter and full year for energy, chemicals and plastics; continued strength in ECP as we onboard new customers Sustained growth in forest products as we leverage our transloads and superior service Forest Products Energy & Chemicals Metals & Minerals Automotive 30% 12% 11% 47% Growth in autos in spite of cyclical weakness Steady construction supportive of aggregates and steel; some headwinds expected with frac sand (1) For a full description and reconciliation of Non-GAAP Measures, see CP s Q Earnings Release on investor.cpr.ca

11 INTERMODAL Q4 18 VS. Q4 17 MARKET DRIVERS & OUTLOOK Freight Revenue (FX-adj.) (1) RTMs Freight Revenue per RTM (FX-adj.) (1) 3% 7% 11% Record year in domestic intermodal; further upside in 2019 as we onboard new business and leverage demand management tools 2018 REVENUE BREAKDOWN Well positioned in international intermodal as we leverage expansion capacity at Deltaport Domestic International 43% 57% (1) For a full description and reconciliation of Non-GAAP Measures, see CP s Q Earnings Release on investor.cpr.ca

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13 FINANCIAL PERFORMANCE Q4 (In millions, except percentages and Fourth Quarter FX adjusted per share data) Change % Change % (1) Total revenues $ 2,006 $ 1, % 15 % Compensation and benefits % 10 % Fuel % 22 % Materials (4%) (6%) Equipment rents (9%) (11%) Depreciation and amortization % 6 % Purchased services and other % 1 % Total operating expenses 1,132 1, % 8 % Operating income % 26 % Other expense (income) % Other components of net periodic benefit recovery (97) (71) 37 % Net interest expense (2%) Income tax expense (recovery) 194 (363) (153%) Net income $ 545 $ 984 (45%) Adjusted income (1) $ 648 $ % Diluted earnings per share (43%) Adjusted diluted earnings per share (1) % Operating ratio 56.5% 60.2% (370) bps (1) For a full description and reconciliation of Non-GAAP Measures, see CP s Q Earnings Release on investor.cpr.ca

14 FINANCIAL PERFORMANCE FULL YEAR Full Year (In millions, except percentages and per share data) % Change Total revenues $ 7,316 $ 6, % Total operating expenses 4,485 4, % Adjusted total operating expenses (1) 4,485 4, % Operating income 2,831 2, % Adjusted operating income (2) 2,831 2, % Net income 1,951 2,405 (19%) Adjusted income (2) 2,080 1,666 25% Operating ratio 61.3% 61.6% (30) bps Adjusted operating ratio (2) 61.3% 62.4% (110) bps Diluted earnings per share (17%) Adjusted diluted earnings per share (2) % (1) Adjusted for $51 million of management transition recovery in Q (2) For a full description and reconciliation of Non-GAAP Measures, see CP s Q Earnings Release on investor.cpr.ca

15 FREE CASH Full Year (in millions) Cash provided by operating activities $2,712 $2,182 Capital expenditures (1,551) (1,340) Other property and asset sales Other 15 3 Cash used in investing activities (1,458) (1,295) Effect of FX on USD-denominated cash & cash equivalents 11 (13) Settlement of forward starting swaps upon debt issuance 24 Free cash flow (1) $1,289 $874 ROIC (1) 15.3% 20.5% Adjusted ROIC (1) 16.2% 14.7% Free cash flow up 47% Continuing to reward shareholders ~40% completed in share buyback program 3 rd straight year of a dividend increase Capital investment of $1.6B in 2019 (1) For a full description and reconciliation of Non-GAAP Measures, see CP s Q Earnings Release on investor.cpr.ca

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